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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 18 December 12
NEWCASTLE PORT IN AUSTRALIA SHIPPED 20.19 PERCENT MORE COAL W/E 17 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 3,269,640 MT of thermal and coking coal for week ended 0700 hours 17 December 2012, Newc ...
Monday, 17 December 12
SHIP PRICES TO BOTTOM OUT IN 2013 SAYS GEORGE D. GOURDOMICHALIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship values especially in older tonnage, or even modern vessels with poor quality are expected to fall further during 2013, with the market as a who ...
Monday, 17 December 12
SYNERGISING WITH PIONEERS TO DEVELOP TOMORROW'S LATIN AMERICAN RAILWAYS
Press Release: Brazil being one of the largest country in South America has one of the most dynamic rail markets in the world. Rail transport in Bra ...
Sunday, 16 December 12
FREIGHT TREND SOFTENED THIS WEEK - VISTAAR
COALspot.com - The freight market further softened this week and closed at 784 points (down by 18.84 pct). The cape index had the biggest fall ...
Friday, 14 December 12
GMR GROUP OF INDIA TO IMPORT 100K MT OF 4800 GAR COAL
COALspot.com: GMR Group of India to invite bids for 100,000 Metric Tons of imported non coking coal to be delivered during January and February 2013 ...
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- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Australian Coal Association
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- PTC India Limited - India
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
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